In his recent essay for the Sacramento Bee, “State’s job growth defies predictions after tax increases,” David Cay Johnston argues that California’s recent job creation numbers prove recent tax increases embodied in Prop. 30 aren’t killing jobs or slowing economic growth.
Yet the evidence Mr. Johnston presents is less than convincing — surprising for an academic and former investigative journalist. He points to recent positive job growth numbers. However, he neglects to mention that California’s “unemployment rate” remains tied for fifth worst in the nation.
Thirteen California counties still have double-digit unemployment rates, the highest of which is 22 percent.
Due in part to California’s oppressive tax and regulatory climate, the recession was markedly worse in our state. As a consequence, we ended up with a bigger jobs hole. Now we need more jobs than other states to fill that hole.
Yet in the past year, states with lower unemployment rates — North Dakota, Utah, Texas, Delaware, Colorado, Florida, Oregon, Indiana, Washington — have out-performed California in per capita job creation.
At best, California’s job creation record is middle of the road. Given our climate, natural and human talent, and need for jobs, we should be leading the nation in employment gains.
Instead, we lead in taxes. California has the highest top income tax rate, the highest statewide sales tax rate and the second highest gas tax. High taxes and fees, combined with an oppressive regulatory environment, contribute to the high cost of living that undermines our state’s competitiveness and impoverishes many of our citizens.
In his op-ed, Mr. Johnston fails to answer, let alone ask, key questions such as:
• How many more jobs would California have created if Prop. 30 hadn’t passed?
• How many job creators have left our state?
• Were the high taxes embodied in Prop. 30 even necessary?
Proponents of Prop. 30 warned of dire consequences, including devastating cuts to schools, should the measure fail. Yet since its passage the state has received a surge in new revenue unrelated to Prop. 30, leading Sacramento Bee columnist Dan Walters to question whether Prop. 30 truly was needed.
Gov. Brown and legislators are using billions in new revenue to grow government programs. What if those dollars were, instead, given back to taxpayers to invest in their families and local communities?
Even the Legislature seems to recognize that California can’t compete under its current tax scheme. Legislators recently voted for a number of boutique tax incentives to keep businesses from leaving our state. How, then, can anyone argue that California taxes and regulations are not driving jobs away?
As California’s economy continues to recover, we should not be satisfied with middle-of-the-road job creation numbers, high taxes and high poverty rates. We can, we must, do better.
Mr. Runner represents nine million Californians as a taxpayer advocate and elected member of the State Board of Equalization. He may be contacted at boe.ca.gov/Runner
